Brazilian steelmaker Gerdau posts quarterly profit fall

div classBodysc17zpet90 cdBBJodivpSAO PAULO Reuters – Brazilian steelmaker Gerdau SA on Thursday reported firstquarter net profit down 17 from the previous three months at 2.94 billion reais 597.96 million as weaker results in Brazil offset an improvement in North America.p

pThe bottom line came in below an expected 3.09 billion reais in an analyst poll by Refinitiv.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pGerdaus domestic EBITDA margin fell 7.2 percentage points from the previous quarter to 24.3, the firm said, mentioning that sales were nearly flat at a high level but the overall scenario posed challenges as interest rates rise.p

p“Prospects for 2022 are for revenue growth and volume drop in distribution and retail. In real estate development, we project stability for both launches and steel sales volume,” Gerdau said in a securities filing.p

The drop in Brazilian margins ended up offsetting strong results in North America, which had been the highlight of Gerdaus fourth quarter earnings.p

EBITDA margin in North America grew by 5.6 percentage points to 27.4, it said.p

Gerdaus firstquarter total steel sales totaled 3.06 million tonnes, down 1 from a year earlier and 3 from the previous three months. Output rose 4 on a sequential basis to 3.4 million tonnes.

Adjusted earnings before interest, taxes, depreciation and amortization EBITDA fell 3 from the previous quarter to 5.83 billion reais.p

Analysts at Bank of America had expected a decline in Gerdau EBITDA on a quarterly basis, which they said would be the latest of a series of mixed results from Brazilian steelmakers on persistent cost pressures, but added that Gerdaus higher production flexibility and lower exposure to coal and iron ore could help it outperform peers.p

1 4.9167 reaisp

Reporting by Gabriel Araujo Editing by David Goodman and Chizu Nomiyama

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